Hundreds of thousands of people in the lending industry, their borrowers, and vendors are grappling with the refi price hit announced Wednesday evening by FHFA Director Calabria. From the Carolinas I received this from Rhonda M. “We are into the J’s now for Atlantic named storms. Wonder if Hurricane Jalabria might work?” In one sense it is merely a transfer of money directly from lenders to the Agencies and the FHFA. When refinancing from 4 percent to 3 percent what added risk is there in this rate term product? None, so why the “refi tax”? We’ll survive, of course, just as we have done with RESPA, TRID, and the 10 basis point increase to gfees that we’re still paying for after Congress directed the FHFA to implement due to the “Temporary” Payroll Tax Cut Continuation Act of 2011. (In fact, the MBA is offering a critical discussion on the impact of Wednesday’s GSE announcement on TRID disclosures.) Survival? It is amazing to me how you can plant a tiny tomato seed, throw in some sun and water and soil, and you have most of a caprese salad a few months later. Did you know that there is a variety of tomato named, “Mortgage Lifter”? Developed in West Virginia, in 1922, the name was in 1932, during The Depression. The plant can be nearly ten feet high and tomatoes weigh 2 pounds!

Lender and Broker Tools

COVID has already forced a change in how we do many things in our industry, and how you build your brand and nurture referral relationships is no different. Although we're currently in a wave of volume driven by low rates and changing consumer behavior, there will be a return to lower volume eventually, and the relationships loan officers have made in the interim will determine how their business performs. A recent blog post from Maxwell highlights how to get the most in developing real estate agent relationships in a COVID world. An easy 5 min read for all lenders. Read Here. 

Redwood is actively purchasing Jumbo loans at extremely competitive rates! On the strength of a transformed balance sheet with financial flexibility, Redwood is expanding its presence in the Jumbo market to bring better solutions to their clients. Redwood’s Select and Choice programs continue to assist lenders with their complex Jumbo borrowers using common sense approaches to underwriting and excellent customer service. Please reach out to your Redwood Relationship Manager for more details!

The actionable Mortgage Risk & Fairness Score answers these critical questions up-front, as an additional layer of intelligence, due-diligence, and promotion: 1) Which borrowers are most likely to request forbearance, go delinquent, or default in the next 12-months? 2) What’s their true ability & “willingness” to pay? 3) What forbearance, loss mit, or refi assistance will best help this exact borrower? 4) Which underserved borrowers will outperform their FICO scores by 50, 100, or more points going forward? 5) Which borrowers in my servicing port are showing signs of instability, mobility, or churn? 6) What loans should I kick from this pool? Are there any arb opportunities? MRS is the most predictive, prescriptive assessment of borrower performance & resiliency, and promotes financial inclusion to boot. It’s plug-n-play, validated (top 10 bank) and vetted (CFPB, OCC, Fed).

Are you ready for VA IRRRL and FHA Streamline refinance opportunities in this market? Learn how to efficiently submit your files once for a final approval! Join Freedom Mortgage Wholesale for live webinar training sessions on VA IRRRL or FHA Streamline mortgage products and origination processes. Ideal for new or experienced government originators. Sign up for a VA IRRRL or FHA Streamline webinar on 8/17 (VA IRRRL) or 8/21 (FHA SL). 

Customer loyalty with lenders is fractured. Black Knight found that only 18 percent of mortgage customers are staying with the same lender after they refinance, and in a white paper done by AboutMyMortgage.com, it was documented that most lending companies only retained 7 percent of their current customers in the market for a new mortgage. But why is it important to retain your past portfolio assets? It’s a simple matter of revenue. Start retaining your current customers and increase your profitability. Home Captain provides customer-centric benefits exclusive to the mortgage and banking industry allowing customers to unlock savings on selling and buying a home with best in class service. All of this is combined with leading technology around MLS search, Artificial Intelligence, concierge service, and propensity modeling. We boast the highest retention rates and service scores within the industry. Visit www.homecaptain.com/portfolio-retention or schedule a meeting here to learn more about how Home Captain. 

Mortgage brokers must provide speed and great pricing to win business in this competitive market. QLMS is delivering both to its partners through its new Prime79 product.  Simply put, this exclusive deal delivers a 79-basis point credit on the most competitive conventional loans in the market. On a $350,000 mortgage, the reduction in cost is over $2,700, and can be used on any conventional term from 8 to 30 years, as long as it fits the Prime79 criteria! With demand for refinances at an all-time high, it is critical to work with lenders who can deliver consistent service while providing a great price; QLMS is doing both! If you are a QLMS partner, call your Account Executive or hop on the portal to see the pricing and Prime79 criteria.  If you aren’t, click HERE and you can be approved and writing loans in as few as 24 hours.

Lending platforms make a lot of big promises (and often come with big price tags). But how can lenders be sure they’ll receive tangible benefits as advertised? Kudos to SimpleNexus for its transparency on this front. SimpleNexus was so confident about its value proposition that independent, third-party consulting firm MarketWise Advisors has been hired to calculate the average ROI its 250+ lender clients receive. To list a few of the study’s findings, on average SimpleNexus customers: improved application conversion rates by 13.61 percent, helping LOs close an additional 6.32 loans/year; reported a 12.85 percent increase in inbound leads/referrals; and saved an average of $258.36/loan in operational costs. Reach out to SimpleNexus to get a custom ROI analysis today.

Compliance: Always Important

Companies were quick to react to the GSE price news. For example, Glenn Stearns, Founder/CEO of Kind Lending, announced that Kind made the decision to honor all locks despite the increased LLPA fees imposed by the agencies. Glenn is steadfast in saying, "our word is our bond" and it's important to allow brokers to honor their word to their borrowers. The outspoken team at Kind Lending are publicly standing behind their broker partners and "doing the right thing" which proves that there is KINDNESS in the mortgage banking industry. Watch the video here. (If you're not doing business with Kind Lending, now is a great reason to sign up as a broker partner.)

As noted above, the MBA is offering a critical discussion on the impact of Wednesday’s GSE announcement on TRID disclosures.

It is rumored that Wells Fargo’s Chief Compliance Officer Mike Roemer is leaving after two years and will be replaced by Paula Dominick.

The Consumer Financial Protection Bureau issued a final rule amending the official interpretations for Regulation Z, which implements the Truth in Lending Act (TILA). The Bureau is required to calculate annually the dollar amounts for several provisions in Regulation Z. This final rule reviews the dollar amounts for provisions implementing TILA and amendments to TILA, including under the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act), the Home Ownership and Equity Protection Act of 1994 (HOEPA), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The CFPB tells us that these adjustments are applicable January 1, 2021, consistent with relevant statutory or regulatory provisions.

The CFPB has published a revised version of the “CHARM Booklet”.

Governor Polis signed Colorado's Remote Online Notary bill (SB20-096) after more than four years of work by the Colorado Mortgage Lenders Association (CMLA) and its coalition of industry partners. This bill includes data privacy protections for remote notarial acts that are more stringent than similar bills passed in other states. This a significant win for the mortgage industry and consumers in Colorado.

Under TRID 101, no guidance was given as to whether or not negative prepaid interest should be included in the first of the “In 5 Years” disclosures on the LE. docutech has posted Global Mapping Addition: Lower TP5Y/TOP Amount by Including Negative Per Diem Interest to provide information.

Oregon recently enacted legislation requiring certain types of forbearance accommodations for mortgage loans. OR HB 4204, § 1(9) (2020) requires “Within 60 days following the effective date of this 2020 special session Act (August 29, 2020), each lender authorized to do business in this state must provide written notice by mail to all of the lender’s borrowers of a borrower’s rights for accommodation under this section.” To help clients provide this disclosure for persons who will become a “borrower” during the effective time of this Act, docutech Compliance has created a new document: OR Forbearance Accommodation Disclosure Cx24147.

Recent changes in Massachusetts regulations are discussed on the docutech Compliance website which include Document Updates and Retirements.

Pennsylvania Governor Tom Wolf signed a new Executive Order that protects homeowners and renters from eviction or foreclosure until Aug. 31st, if they have not received assistance from a new program administered by the Pennsylvania Housing Finance Agency (PHFA) or are not already receiving relief through one of several federal foreclosure moratorium programs or judicial orders. Lenders and property owners that receive funds through the PHFA program agree not pursue foreclosure or eviction actions as a condition of participation in the program.

The governor signed legislation in May providing $150 million for rental assistance and $25 million for mortgage assistance through PHFA with CARES Act funds. PHFA began accepting applications July 6th.

Capital Markets

MBS and Treasury yields reacted how you would expect following another stronger than expected inflation-related print (import prices, after CPI and PPI earlier this week). The yield curve steepened and afternoon selling lifted the 30-year yield to its highest close in seven weeks after the day’s record-sized $26 billion 30-year bond auction was met with poor demand. Aiding the move was a peace agreement between Israel and UAE.

It wasn’t just import prices that brought “good” news yesterday. Initial claims for the week ending August 8 decreased to below a million for the first time in five months, an encouraging sign for the labor market recovery. Initial claims, however, are still about four times as large as prior to the surge in late March as well as above the peak value seen during the last recession. Meanwhile, continued claims declined by over 600k to 15.5 million, the lowest print since early April. The figure does remain at historically unprecedented levels and continues to indicate that the total extent of joblessness is incredibly high. Both import and export prices have increased in June and July, which is healthy.

The Primary Mortgage Market Survey for the week ending August 13 from Freddie Mac saw rates pull back from their survey lows with the 30-year fixed rates rising to 2.96 percent. Homebuyer demand remains strong, especially for those in search of an entry-level home where there has been a material improvement in affordability due to lower mortgage rates. A year ago at this time, the 30-year averaged 3.60 percent. The late Wednesday GSE announcement regarding a 50 bps LLAP adverse market fee commencing September 1 is expected to increase rates on refinancing by 0.125 percent.

For yesterday’s two FedTrade operations, the Desk purchased nearly all of the $4.2 billion maximum ($4.3 billion), with 65.9 percent in UMBS30s and the remaining 34.1 percent in GNIIs. The Desk also released the tentative MBS reinvestment estimate and calendar for the next several weeks. The reinvestment estimate is $110.3 billion, based on $70.3 billion in paydowns plus the SOMA increase of $40 billion. The new schedule totals a maximum of $52.5 billion with 2 percent being added to some of the GNII operations with 3 percent dropping out of UMBS30 operations, though still included in some GNII operations. Sizes by agency are a bit higher for conventionals and smaller for GNIIs versus the prior schedule. Today, the Desk will conduct three operations targeting up to $5 billion starting with $765 million UMBS15 2 percent and 2.5 percent followed by $2.8 billion UMBS30 2 percent and 2.5 percent and $1.4 billion GNII 2.5 percent and 3 percent.

Today’s busy economic calendar is already underway. We’ve had July Retail Sales (+1.2 percent, worse than expected), ex-auto (1.9 percent), preliminary Q2 Productivity (+7.3 percent), and preliminary Q2 Unit Labor Costs (+12.2 percent, showing the impact of lower paid people leaving the workforce). Releases rounding out the week later this morning include July Industrial Production and Capacity Utilization, Preliminary August University of Michigan Consumer Sentiment Survey and June Business Inventories. Dallas’ Kaplan is the lone scheduled Fed speaker. We begin today with Agency MBS prices roughly unchanged and the 10-year yielding .71 after closing yesterday. At 0.72 percent.

Employment and Transitions

“The services and support that the Motto Mortgage network offers are amazing because they have a great CRM and so many marketing materials – it’s just the full package. I feel so far ahead of other LOs.” (Tracy Molenaar, Motto Mortgage Experience.) Take it from a loan originator in the Motto Mortgage brokerage network, when you join a Motto Mortgage office, you gain access to industry-leading LOS and CRM technology, training and support services, marketing tools and a wide selection of loan products to meet client needs. Bolster your home loan business with the mortgage network that puts brokers ahead of the competition. Motto Mortgage offices are recruiting nationwide, with specific need in AZ, DE, GA, HI, ID, KS, KY, MI, MO, NJ, NV, OH, OR, PA, TN, VA and WA.

MCT is hiring for a Controller in the Philadelphia area. This position will be remote based with occasional need for onsite presence and report to the CFO. Since 2001, MCT has grown from a mortgage pipeline hedging specialist to a fully integrated provider of capital markets services and technology. The company prides itself on its recognition as a “Best Place to Work”, as well as the top-rated Hedge Advisory by market share and client satisfaction. Candidates should have a BA in Accounting, a CPA license, accounting software (QuickBooks) expertise, and 4+ years of experience in similar roles in the Financial Services industry. MCT’s new controller will develop and strengthen internal controls, processes, financial reporting, and budget development for the rapidly growing company. Qualified candidates can email applications to hr@mctrade.net 

Regular readers of the Chrisman Report will recognize this headline: ‘ABC Mortgage/Lender is hiring for UWS, Processors, Funders, Closers, Loan Officers, etc. Come join our growing company!’ Not surprising since we’re in the middle of one of the biggest origination booms in history. But are you prepared for what comes next? Feast or famine, Agility 360, a mortgage-centric Workforce Management company is your trusted partner for recruiting, managing, AND retaining industry-leading talent. Through our unique planning methodology, we provide vetting and personnel assessment tools that ensure your company’s continued profitability in any rate environment. For us, it’s more than just filling positions and deploying personnel; it’s about being a long-term partner that provides intelligence, analysis, and continued workforce optimization. Whether you need short or long-term staff (UWs, Processors, Funders, QC Auditors, Servicing Specialist, Management personnel), Agility 360 is the solution partner mortgage companies use. For more information please contact Raj Sharma or visit our website for more information.